2023 has been quite an interesting year. From Credit Suisse recoveries to monitoring the current state of China, private venture investors are on the edge of their seats.
However, the difference between startups compared to any other investment in an economic downturn is that according to history, the most successful startups are built during recessions (Airbnb, Uber, Slack, Venmo, Instagram).
Even COVID-19 built multiple billion-dollar companies in Southeast Asia (Grab, Traveloka, Shopee, Lazada).
The question here is, unlike other investments, why are startup investments unaffected during market pullbacks?
Startups are not an up-and-down buy-and-sell charts game. There are no big boys manipulating the market unlike stocks and crypto-trading, there is no FUD (Fear, Uncertainty, Doubt). You're all in it to win it together.
Startups implement cost-saving strategies in their operations, such as managing working capital efficiently, limiting research and development expenditures, and making the most of proven marketing techniques.
Startups that secured funding in the previous year should explore ways to extend their financial runway, including postponing major capital commitments and revisiting the terms of debt repayment.
Founders should prioritize revenue generation by monitoring essential metrics like reducing customer acquisition costs, increasing the lifetime value of customers, and maintaining high customer retention through a value-driven product that addresses a core market problem.
You might be thinking, if startups are great long-term investments with high returns, why aren’t people investing more in startups?
Startup investments have been around for a while but the limitations of access have been a long-term issue even until today.
Traditionally, unless you happen to be a founder, family member, or close friend of a founder, chances are you will not be able to get in at the very beginning of an exciting new startup. And unless you happen to be a wealthy, accredited investor, you will likely not be able to participate as an angel investor.
However, with A2D Ventures, anyone can begin investing in startups. Our team of experts with over 7 years of experience, brings you the best and most exclusive hand-picked deals alongside top-tier VCs.
*The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
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